Non-Conviction Based Confiscation and Unexplained Wealth Orders: A Contradiction in Terms?

The Directive on Asset Recovery and Confiscation (2024/1260) was adopted by the European Parliament in April 2024. This recent Directive has introduced a powerful yet controversial tool in the fight against organized crime and corruption. Articles 15 and 16, which deal with non-conviction-based confiscations (NCBC) and unexplained wealth orders, have sparked concerns about their implication on fair trial rights, particularly the presumption of innocence. The presumption of innocence is a fundamental principle protected by several international treaties, most notably Article 6 of the European Convention for the Protection of Human Rights and Fundamental Freedoms (ECHR).

Considering the concerns around this Directive, it is up to The European Court of Human Rights (ECtHR) to reconcile Article 15 and 16 with the presumption of innocence. But is that possible when the wording of these provisions appears to be a blatant contradiction in legal principles?

Articles 15 – Non-Conviction Based Confiscation as a form of Non-Guilt Based Punishment

Article 15 of the Directive allows for the confiscation of assets, without a criminal conviction, in specific circumstances. This provision is designed to address situations where traditional conviction-based confiscation is not possible, such as when a suspect has fallen ill, absconded, died, or even when the statute of limitations has expired. The article allows for confiscations in cases where “it would have been possible for the relevant criminal proceedings to lead to a criminal conviction” (article 15 (2)) but for the former inhibiting circumstances. This requires courts to hypothetically establish criminal responsibility outside of a criminal trial.

If a conviction is traditionally arrived at when someone is found guilty, then any “non-conviction” based action means to take punitive measures against someone who has not yet been found guilty – and is, in other words, legally innocent. It is hard to imagine that provisions that take punitive measures against someone who may be innocent is reconcilable with the presumption of innocence. NCBC’s therefore reflect two directly opposing legal principles and appears to be a contraction in terms.

Article 16 – Unexplained wealth orders as unjustified punitive measures

Article 16 introduces the concept of unexplained wealth orders. This provision allows courts to order confiscation when they are satisfied that certain assets are derived from criminal conduct within a criminal organization, even without proving specific offenses – for example, where the court cannot explain the illicit origin of the wealth. While this may be a necessary tool for targeting the complex financial structures of organized crime, the provision is far too broad, with the danger that the court’s power to seize assets will become arbitrary.

The concept of “unexplained” wealth orders undermines the presumption of innocence by imposing punitive measures without proving criminality. This approach shifts the burden onto suspects to justify their assets’ legitimacy, presuming wrongdoing in the absence of a proper legal explanation. This contradicts the principle that guilt must be proven beyond reasonable doubt. If the court cannot explain the illicit origin of the wealth, it cannot logically impose confiscation without violating the presumption of innocence. “Unexplained” wealth orders allow a court to act arbitrarily and order “unjustified” punitive measures, which is a contradiction in legal principles.

The courts contradictory approach

In a recent judgment of the ECtHR in Nealon and Hallam v. the United Kingdom (2024), the Court found that it is prohibited to state that a person is guilty after a discontinuance of criminal proceedings against them. To “impute criminal liability to a person” (para. 168) or otherwise, to imply that they are guilty, is in direct violation of Article 6 § 2 of the ECHR. There therefore seems to be strong tension between the hypothetical establishment of criminal responsibility mandated in Article 15 and the Courts prohibition against the imputation of criminal liability. This principle was further reinforced in Episcopo and Bassani v. Italy (2024), where the Court found a violation of Article 6 § 2 when Italian courts explicitly stated that an applicant was “criminally liable” despite the discontinuance of criminal proceedings.

With regards to Article 16 of the Directive however, the ECtHR has taken a significant shift from its strict adherence to the presumption of innocence. Instead, it affirms in Garofalo and Others v. Italy (2024) that the confiscation of unexplained wealth linked to criminal conduct can be imposed without a criminal conviction by characterizing confiscation as a “preventive”, non-punitive and restorative measure. By doing so, the ECtHR has created a ‘new’ framework under Article 16 that allows for preventive confiscation. However, such distinction treads dangerously with encroaching on the rights of the accused, as it simply disguises punishment under the banner of “prevention”.

Punishment disguised in Sheep’s Clothing

The Court’s ruling in the Garofalo case attempts to justify a distinction between preventive confiscation and criminal sanctions. The Court noted that preventive measures do not presuppose a crime and are aimed at preventing future criminal activity by individuals deemed dangerous. While the ruling reflects an attempt to balance individual rights with the state’s interest in combating organized crime and illicit wealth accumulation, the Court’s characterization of confiscation as a preventative and restorative measure sidesteps the strict application of criminal law protections. This is especially so given that the standard of “reasonable presumption” (that the asset has been purchased with the proceeds of unlawful activities) (Garofalo, para. 100) is at direct odds with proving criminal conduct “beyond reasonable doubt”, which severely restricts the presumption of innocence.

As a final contradiction in terms, how can confiscation be deemed ‘preventative’ when it quite clearly has ‘punitive’ effects? A mere reframing of the conduct taken by the Court does not derogate from the fact that either way, the same harm is caused. This raises significant concerns about the future application of the presumption of innocence under Article 15 and 16. Will the ECtHR continue to condemn non-guilt-based punishment and unjustified punitive measures, or will it endorse punitive confiscations under the disguise of “prevention”?

Article written by Angelica Vieira, Attorney and Fair Trials’ EIPAC member. 

Article edited by Ángela Rodríguez, Fair Trials’ Communication Manager.